Alcoa Mulls Production Cuts

The aluminum firm Alcoa is considering cutting 460,000 metric tons of aluminum capacity over the next 15 months. In a press release, Alcoa says the decision has been partly driven by aluminum prices, which have declined by more than 33 percent since peaking in 2011.

Alcoa adds that it currently has 568,000 metric tons of smelting capacity idled.

“Because of persistent weakness in global aluminum prices, we need to review every option to maintain Alcoa’s competitiveness,” says Chris Ayers, president of Alcoa’s Global Primary Products. “Any action taken will only be done after a thorough strategic review and consultations with stakeholders.”

According to Alcoa, the review will include facilities across its system and will focus on higher-cost plants and plants that have long-term risk due to factors such as energy costs or regulatory uncertainty. The possible curtailments could affect 11 percent of Alcoa’s global smelting capacity.

As part of the process Alcoa will consider a range of actions, including discontinuing pot relining to full plant curtailments and/or permanent shutdowns. Alcoa’s alumina refining system will also be reviewed to reflect any curtailments in smelting as well as prevailing market conditions.